British Chancellor of the Exchequer Alistair Darling poses with his ministerial dispatch box as he leaves 11 Downing Street for the Houses of Parliament, to deliver the annual budget to the House of Commons, London, Wednesday, April 22, 2009. (AP Photo/Alastair Grant)

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Britain's Chancellor of the Exchequer Alistair Darling poses with his ministerial red dispatch box as he leaves 11 Downing Street in London, to deliver the annual budget to the House of Commons, Wednesday, April 22, 2009. On the road in front of him sunlight is reflected off the windows of No's 10 and 11 Downing Street. (AP Photo/Matt Dunham/pool)

British Chancellor of the Exchequer Alistair Darling, carrying his ministerial dispatch box, leaves 11 Downing Street for the Houses of Parliament, to deliver the annual budget to the House of Commons, London, Wednesday, April 22, 2009. (AP Photo/Alastair Grant)

British Chancellor of Exchequer Alistair Darling poses with his ministerial dispatch box as he leaves 11 Downing Street in London for the Houses of Parliament to deliver the annual budget to the House of Commons, Wednesday, April 22, 2009. (AP Photo/Sang Tan)

Britain's Chancellor of the Exchequer Alistair Darling poses with his ministerial red dispatch box as he leaves 11 Downing Street in London, to deliver the annual budget to the House of Commons, Wednesday, April 22, 2009. (AP Photo/Matt Dunham/pool)

British Chancellor of Exchequer Alistair Darling, center, poses with his ministerial dispatch box and members of his Treasury team as he leaves 11 Downing Street in London for the Houses of Parliament to deliver the annual budget to the Common, Wednesday, April 22, 2009. From left to right, Financial Secretary to the Treasury Stephen Timms, Chief Secretary to the Treasury Yvette Cooper, Chancellor of Exchequer Alistair Darling, Exchequer Secretary to the Treasury Angela Eagle and City Minister Lord Myners. (AP Photo/Sang Tan)

But it is also to receive additional allocations adding up to some £116m from the Treasury over this year and next — adding up to a net loss of some £7m.

The £123m cut represents the Stormont Executive’s contribution to a £5bn reduction in UK public spending in the financial year 2010/11.

Mr Dodds had warned earlier this year that the Treasury’s plan to claw back these efficiency savings could have “a serious |impact” on the province’s devolved administration.

He said yesterday: “While it is disappointing that Northern Ireland has not been allowed to |retain the savings from additional efficiencies, I note that the net impact is less than had been feared as a result of the £50.3m of additional funding for the Executive in the current financial year and £66.1m in 2010/11.”

The Chancellor’s Budget statement also referred to plans for £9bn of additional efficiency savings across the UK by 2013/14.

Mr Dodds said: “Although the impact of the additional efficiency savings for Northern Ireland for 2011/12 and beyond will only become clear at the next UK Spending Review, the reality is that we are entering a period of lower growth public spending of 0.7% per annum at the UK level, which will require careful consideration of administrative structures and the public service delivery chain in Northern Ireland.

“However, for the short-term we must continue to prioritise frontline services and focus attention on maximising savings from back-office functions and potentially inefficient institutional structures.”

This reference to “potentially |inefficient” structures reflects the DUP’s wish to see a scaled-down Assembly and fewer government departments in Northern Ireland.

This theme was taken up yesterday by the minister’s Assembly party colleague Simon Hamilton.

He called for fewer government departments and MLAs and “a reduction in bureaucracy, red-tape and useless quangos”.

Northern Ireland Secretary of State Shaun Woodward yesterday announced that he had secured an additional £28.7m from the Chancellor to support the work of the PSNI.

Mr Woodward also said the Budget had brought “real and tangible” benefits for Northern Ireland and represented a good day for the province.

“Whilst the Government has expected Northern Ireland, like everywhere else in the UK, to make savings by greater efficiency around £122m, the Chancellor announced increased provision of £116m for the Executive to spend on its budget,” he said.

“And because I want to ensure we fully support the needs of the PSNI, I have secured from the Chancellor an additional £28.7m to support their work and this is particularly welcome. It will |enable the Chief Constable to |address current pressures arising from increased criminal activity from so-called dissident republicans.”